I’m giving a seminar to be presented for NHFA during the upcoming High Point market. The seminar entitled “The #1 Secret To Grow Your Furniture Retail Business In A Down Economy” will be presented on the first floor of the Plaza Suites in the NHFA Retailer Resource Center.

This seminar addresses a fundamental shift that has occurred in the marketing of home furnishings businesses. I’ll address the challenges retailers face to capture customer’s attention and then provide some real world solutions that are working for astute retailers across the country.

Most retailers are struggling in this economy. They’re doing things wrong! They’re doing things the same way they did when the economy was good. Consequently the results are not what they want or expect.

Many of the tricks and techniques other industries are using to grow in tough times can be easily adopted for the furniture industry. “The# 1 Secret to Grow Your Business In A Down Economy” has much to do with the strategy of how to integrate a variety of medias to simply and easily attract qualified customers to a furniture retail business when the customer is ready to do business with the retailer. By embracing cost effective new media solutions, personal interaction between a furniture retailer and the end user becomes infinitely simpler.

I’ll share specific strategies that are working along with low cost solutions that furniture retailers can implement easily and effectively. Where appropriate I’ll also offer recommendations of resources that will help save you time and money getting started.

For these challenging economic times, this seminar could be one of the most valuable retailer resources at the North Carolina market. If you are a rep reading this column, please invite your retailers.

Mike Root and Bob Berger finished with 7 birdies to win the 2010 Omaha Country Club Sam Reynolds Golf Tournament

Root and Berger Win Omaha Country Club's Annual Member Golf Tourney

After many years of trying, my golfing partner Bob Berger and I won the Omaha Country Club Sam Reynolds Golf Tournament. It is the annual Member Member Golfing event played over the first weekend in August every year. The great thing about this format is that the winning team really has to have both members play consistent both days.

In our case, I did not play particularly well for most of the second round while my partner was doing his best to keep us in the game with three birdies. Somewhere on the back nine I woke up. I had a birdie on 13. Then finished with birdies on 16, 17 and 18 which is what needed to happen in order to win it all.

It’s one more thing I can take off my goal list.

I think my work with Tom Sieckmann is starting to pay off . Now if I can just get playing consistent enought to be scratch.

This week I spoke to a group of sales and marketing professionals from Midwest Labs at their annual Marketing Conference. I always enjoy sharing my sales and marketing expertise with people in other industries. The group from Midwest Labs run a very successful testing lab for a variety of elements from soil testing to food to environmental. This obviously calls for a diverse group of clients in business to business selling and business to consumer selling.

They attend a variety of trade shows throughout the year and so much of my presentation was built around how to be most effective at a trade show. If you would like to have a copy of my outline on the presentation entitled “17.5 Keys A Sales Rep Can Make Their Upcoming Market or Trade Show the Most Successful Ever”, send us an email at meroot@mikeroot.com with the subject line Tradeshow and we will forward it onto you.

The four categories I discussed were as follows:

Knowledge of Your Customer, Client or Prospect’s Needs As It Pertains to Your Product

Communication To Your Customer, Client or Prospect Before The Market or Trade Show

Communication To Your Customer, Client or Prospect During The Market or Trade Show

Communication To Your Customer, Client or Prospect After The Market or Trade Show

It was a great group of people and I think they were amazed that applying principles of furniture sales could actually apply to them. But you see thatt’s the big secret. What works in marketing furniture will work in marketing of accounting, dentistry, and even soil samples.

Yesterday, the New York Stock Exchange recorded a 1010.14 intraday trading loss that they are blaming on computer errors. By the end of the day the stock market had recovered some of the lost ground only being down 347.80. But for the consumer that is somewhat skittish about the shape of the economy and is concerned about huge run up in stocks over the last several months, this event may be one more challenge for ongoing consumer confidence.

Even though business in the first quarter has been good for a number of retailers, the rest of the year still looks to be a challenge requiring aggressive promotional activities coupled with sharp merchandising to encourage the customers to part with their dollars. The government stimulus of tax refunds and new homeowner tax credit are gone for the year. The good news is that a number of people have bought homes recently and will need furniture. The bad news is that without the tax credit, the housing activity is expected to be stagnant for several months which does not bode well for later year activity.

But of far greater concern is the overall health of the economy beyond housing

My son Jay and I attended the Glazer Kennedy Super Conference recently where high level entrepreneurs and sharp marketing people gather to network and share ideas that are working in businesses across the country. In one session of over 800 people, the speaker asked for a show of hands of how many people had an increase in business from 2008 to 2009 and over two thirds of the room raised their hands.

Mike and Jay Root with Harry S. Dent. Jr.

Into this environment, we had the good fortune to hear from Harry S. Dent, Jr. The program introduced him as “among the most reliable, successful and celebrated economic and business trend forecasters of our time!” Dent uses the science of demographics to predict the direction of the economic activities in all countries. His recent book and an audio CD series that followed deal with “The Great Depression Ahead” and “How to Prosper in The Downturn” in my opinion are must reading and listening to gain a different perspective on the true state of the economy.

Jay and I actually had lunch with Harry before his talk (it’s a long story so if interested in how I did that you’ll have to ask me later). But I can tell you from the lunch and later the speech that Harry is unwavering in his predictions. There is absolutely no uncertainty in his mind that what is about to occur is inevitable. It is not if, but when.

And folks, it’s quite scary….

What Harry predicts is that we will experience a huge market crash sometime late summer to early fall of this year.

He believes the market could lose 50% or more of its value by year end.

He believes it will take approximately 2 years thereafter before the economy gets back on its feet.

To prosper he recommends going very liquid in your investments so that when the market does tank, you will be there to buy up stocks at 50 cents on the dollar.

Get rid of any non-performing real estate at whatever the price because it will be worth less in 6 months.

Based on life cycle spending, demographers can predict with much certainty when household spending patterns will peak and fall. Harry’s predictions are that the baby boom generation spending habits are entering a period of saving for retirement and not spending on kids or things. There will be a lack of demand for many consumer products because the next generation coming along is much smaller and will not have the same buying power as the baby boom generation.

His specific timing for the crash later this summer is based on several elements.

Mortgages are due to reset in July, August, September, October. More foreclosures will follow.

Consumers will not be participating in the 2nd and 3rd quarters when the government stimulus wears off. Unemployment is still quite high around 10% so there is not purchasing power.

Investment banks are highly leveraged

There is an incredible amount of government debt along with unfunded federal liabilities that must be accounted for.

Interest rates are being artificially held down. Once they go up it will stifle investment even more.

China has a huge real estate bubble that could pop by year end.

This problem in Greece is just one of many European country challenges that will hurt the US indirectly.

In his opinion, the real concern is not inflation but deflation. The private sector is massively deleveraging that leads to deflation. The last time we saw deflation on this scale in the country was 1929 through the 1930’s. Businesses that keep standing will be the winners. Businesses with cash, cash flow, and credit will survive and thrive after the next couple year’s shakeout.

I present this to you as an insight for contrarianism that if proved accurate could help you position your business and your financial future. I am by no means a financial authority, and my financial advisor did not get as worked up about Harry’s teachings as I did. So do not take this column as an endorsement and blame me if it doesn’t work.

Being from Omaha, I have a better than working knowledge of home grown Berkshire Hathaway Company and its iconic leader Warren Buffett. As most should know, Berkshire Hathaway is a company that has the highest priced shares traded on the stock market (at one time over $150,000 for one share). This value has kept Mr. Buffett as one of the top 3 wealthiest people in the world for over a decade.
I have met several people that are original investors and are now worth millions and in some cases billions. In most cases, except for their philanthropy around Omaha, these people live their daily lives without the ostentatious lifestyle normally associated with such great wealth.
I personally know families that built marvelous businesses and sold out to Mr. Buffett. In every case they got up the next morning, went to work, and continued to run the same business with no changes in their personal work effort. These entrepreneurs turned Berkshire millionaires continued to give every bit of effort working for Warren Buffett as they did for themselves. They stand in sharp contrast to all the greed that has recently been on display from Wall Street bankers and corporate chieftains who are strictly in it for the money. The Berkshire folks I have met over the years are a much more respectable group of folks, and truly an embodiment of what has made our country great
There is no better place to get a feel of the inner workings of a Berkshire Hathaway type of company and quality of an entrepreneur that built it than in reading a brand new book entitled How to Build a Business Warren Buffett Would Buy; The R. C. Willey Story by Jeff Benedict. It is the story of how a small door to door sales operation started in the Utah countryside turned into a Billion Dollar Retailer. R. C. Willey is respected by consumers throughout Utah, Nevada, Idaho and California as well as manufacturers in the home furnishings, electronics and appliance industries.
More importantly, this is a story of a remarkable entrepreneur, Bill Child. He was the reluctant retailer that led this company from 1954 when founder R. C. Willey suddenly passed away. Bill inherited a business with no assets except customer’s goodwill, and he grew the business over time into a business that Warren Buffett purchased for $175 million in stock.
I would go so far as to say that if you are in the furniture business, the retail business, or you service any type of retail business, this is a must read book (to order go to www.TheRCWilleyStory.com). This is also a terrific book full of wisdom for the entrepreneur or small businessman who wants to grow his business over time.
There are no quick fix solutions to growing a main street business. We are not talking about becoming a Google millionaire. It takes hard work, dedicated employees, loyal customers and a willingness to try new things so that the business does not become stagnant. This book encompasses all of that plus what it takes to build a rags to riches story while still holding true to your inner convictions.
I think all my friends that are in the furniture business will empathize with many of the struggles to build a business one sale at a time. I think many of my friends working in small business will relate to the challenges and the innovation it takes to grow a profitable enterprise. And, I think many of my friends that are struggling entrepreneurs will be inspired by the success of having a lifetime of hard work rewarded.
One of the chapters that will resonate with any serious business person and can easily be incorporated into your own business philosophy is the 10th Chapter “Rules to Live By”. These are 8 common sense principles that are backed up by easy to relate anecdotes. For example, number 4 is simply put – Be Honest. I loved their saying “If you always tell the truth, you never have to remember what you said”. If Wall Street and Washington acted with this integrity we wouldn’t have the problems we have today.
In the book Bill Child is quoted as saying “The world changes. Many of the furniture companies that have gone out of business have done so because they failed to change.” We have that challenge today in the furniture business (as do many other industries) with lots of change being thrown at us. It will never be the same because “customers’ needs and expectations change”.
Whether you are a furniture rep, a retailer or manufacturer, you need to adapt to the changes or be overrun by them. I know several years ago we saw the erosion of commissions for furniture reps. We could have complained and got angry that the rep was being squeezed, but the reality was that the business has changed. We looked at the landscape and realized the large retailers like Walmart figured out a way to make a good living on very thin margins by working on volume. Consequently we designed our business with a volume model that has served us well.
Of course there are several other ways to make money including selling luxury products at a premium price to the affluent. It doesn’t matter what the model as long as you look at the landscape, determine your unique selling proposition and design your business model around serving that customer.
There are fourteen management principles and philosophies gleaned of decades of hard work and hard knocks that Bill Child lists at the end of the book. These simple ideas are worth more than a masters in business because they are easy to understand and proven to work.
Finally, in challenging times like these you can never be complacent. No matter how successful you have been, as Bill says “You can only stand on the laurels of what you did yesterday for a few minutes. Then you have the challenges of tomorrow.” There are definitely challenges and this book will inspire you to relook at your business and build for tomorrow.
I could write for pages about all the great takeaways in this book, but that would be doing a disservice to the author and to you. There are no excuses not to get the book right now. Go to a bookstore and get the book or order online. You will be glad you did.

Though I have met Mr. Buffett in Omaha a few times, the only picture I ever had taken with him was at an R. C. Willey store Grand Opening event in Las Vegas.

Wealth Creating Strategies from the World’s Most Successful Entrepreneurs

This past week I was in Chicago at a conference and I was introduced to 900 plus people as an author. That was pretty cool. Dan Kennedy, Bill Glazer, Lee Milteer asked me to contribute to a book called Secrets of Peak Performers, Wealth Creating Strategies from the World’s Most Successful Entrepreneurs. I am very pleased at how the final product came out.

There are several very good contributions that can apply to anyone in any occupation.